Well, credit unioners, last week proved that even in the dog days of summer impactful activities never take a vacation. From federal courts shaking up interchange fee structures to state attorneys general taking aim at payment platforms, there’s plenty to keep your teams busy. Let’s dive into some of what happened while you were hopefully enjoying some summer downtime.
In other words, CU throughout the week. (Folks, I’m workshopping puns here. They can’t all be winners.)
Corner Post Strikes Again: Interchange Fee Regulation II Overturned and Stayed
- U.S. District Judge in North Dakota vacated the Federal Reserve’s Regulation II debit card interchange fee cap
- In short, the Court ruled the Fed unlawfully expanded allowable cost categories beyond statutory limits
- The decision is stayed pending appeals to prevent market disruption
- The ruling does not impact the Fed’s separate October 2023 proposal to further lower the cap
“Debanking” Gets the Executive Treatment
- President Trump signed the Guaranteeing Fair Banking for All Americans Executive Order, directing federal agencies, including NCUA and CFPB, to investigate “politicized or unlawful debanking” practices and regulations that could lead to account closures
- Emphasizes risk-based assessments should be “reasonable and apolitical”
- The EO mandates removal of “reputation risk” language from regulatory guidance
CFPB Reverses Course on Open Banking Rule
- CFPB announced it will issue a revised Section 1033 open banking rule rather than withdrawing it entirely as it previously announced
- It plans on an accelerated rulemaking process with advanced notice expected within three weeks
- Original compliance deadlines starting April 1, 2026, for largest institutions remain in flux
New York AG Sues Zelle Over Fraud Failures
- NY Attorney General Letitia James sued Early Warning Services (Zelle’s operator) alleging inadequate security measures enabled over $1 billion in consumer fraud losses between 2017-2023
- The suit alleges EWS prioritized rapid expansion over user security, leading to surge in unauthorized access and deceptive payment schemes
- AG seeks restitution for affected New Yorkers and demands implementation of stronger anti-fraud measures
- This lawsuit follows on the CFPB’s March 2025 dismissal of similar federal lawsuit
Mortgage Trigger Leads Bill Passes Congress
- On August 2nd, the Senate passed H.R. 2808, the Homebuyers Privacy Protection Act, will take effect 180 days after President Trump signs the bill into law, will significantly curtail the consumer offensive practice of mortgage trigger leads.
- Currently, when a consumer applies for a mortgage loan, the fact that they have done so is sold to other creditors by consumer reporting agencies. These other creditors then inundate the consumer with mortgage solicitations via call, text message, and/or e-mail. In many instances, the consumer is furious with their original creditor because they assume the fact that they applied for a mortgage loan was information that was shared by the creditor.
- Under the Act, a creditor will only be able to obtain a mortgage trigger lead from a consumer reporting agency if:
- The creditor will be making a firm offer of credit to the consumer, and
- The creditor submits documentation to the consumer reporting agency that it
- Has authorization from the consumer to obtain his/her consumer report,
- Originated the consumer’s residential mortgage loan,
- Services the consumer’s current residential mortgage loan, or
- Is an insured depository institution that holds a current account for the consumer.
Looking Ahead
Next week, keep an eye on the Federal Reserve’s response to the interchange fee ruling. The CFPB’s promised “accelerated” open banking rulemaking should also provide more clarity on data sharing timelines. And with the NY AG’s Zelle lawsuit making waves, expect increased scrutiny of P2P payment platform partnerships.
Let’s Make This Useful
I want this blog to be as relevant as possible to the people reading it. So:
- Got a topic you’d like me to break down?
- Burning desire to know more about that headline you read the other day?
- Have an industry-related question you want addressed?
Reach out to me at jeremy.newman@nycua.org. Let’s talk.
Until Next Time
From the big picture to the fine print, we’ve got you covered. Thanks for reading, and CU in the next post.